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complaining of the Defendant Samuel F. Eakin (“Eakin”) would respectfully show unto this
PARTIES
1. Westchester is a New York corporation with its principal place of business at 436
3. This Court has jurisdiction over this case pursuant to 28 U.S.C. § 1332 because it
involves a dispute between citizens of different states and an amount in controversy greater than
FACTUAL BACKGROUND
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(the “Bond”) dated August 1, 2006 naming Kellogg Brown & Root, Inc. (also known as Kellogg
Brown & Root Services, Inc.) (“KBR”) as obligee, and Sanders Bros., Inc; (“Sanders”) as
principal, in the penal sum of $1,186,877.10, for Sanders’ performance of a subcontract with
KBR dated July 24, 2006, for Subcontract 304-2994-US94-SC014 (the “Subcontract”) High Bay
Canaveral Air Force Station, Florida. A copy of the Bond is attached as Exhibit A.
7. By the terms of the Indemnity Eakin assumed the obligation of principal under the
Bond.
indemnified” Westchester “from and against any and all liability for losses and/or expenses of
whatsoever kind or nature, (including, but not limited to interest, court costs, and counsel fees)
and from and against any and all such losses and/expenses” that Westchester “may sustain and
incur” by reason of having executed the Bond or in connection with the Indemnity.
collateral in the amount of any reserve set by Westchester for any liability that exists or is
10. On May 5, 2009, KBR filed a Demand for Arbitration with the American
Arbitration Association (“AAA”) styled Kellogg, Brown & Root Services, Inc. v. Sanders
Brothers, Inc., No. 70 421 Y 0031009 (the “Arbitration”), asserting that Sanders breached the
Subcontract by performing defective work, refusing to remedy the defective work, and forcing
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11. The arbitrator entered a final award in the Arbitration in favor of KBR and against
Sanders dated March 25, 2010, in the amount of $985,942.37, plus interest at 5 percent,
12. KBR filed a motion to confirm the award in the United States District Court for
the Southern District of Texas at Docket No. 10-cv-01441 and the Court confirmed the award
and entered judgment against Sanders by Order dated July 30, 2010.
13. KBR filed suit against Westchester in the United States District Court for the
Southern District of Texas at Docket No. 10-cv-02632 (the “Texas Action”) seeking payment
14. KBR commenced an AAA arbitration against Westchester styled Kellogg, Brown
& Root Services, Inc. v. Westchester Fire Insurance Company., No 70 742 00592 10 seeking
15. KBR demanded that Westchester pay the judgment together with interest and
16. By letter dated July 12, 2010 (the “Demand Letter”), Westchester notified Eakin
that it had established a reserve in the amount of $1,000,000 for KBR’s claim and that Eakin was
required to immediately deposit with Westchester collateral in that amount. A copy of the
17. On August 11, 2010, Westchester paid $1,082,053.30 to satisfy KBR’s Bond
claim.
18. Eakin has breached the Indemnity by failing to deposit the collateral Westchester
demanded and by failing to make any payment to Westchester for the amount paid to KBR or for
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a. Against Eakin for the amount Westchester paid to KBR (less recoveries by
Westchester from others) together with all of the costs and expenses paid or
b. And, the additional costs and expenses it may pay or incur in this action and
c. Prejudgment interest.
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EXHIBIT A
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EXHIBIT B
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EXHIBIT C
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